Two judgments of the Supreme Court shed some light but also cast some shade on the legal limits of vicarious liability in employment and non-employment cases.
In Wm Morrison Supermarkets Plc v Various Claimants [2020] UKSC 12, an employment case, the Supreme Court reviewed the scope of an employer’s vicarious liability for the acts and omissions of its employees. In a judgment which is a corrective to earlier decisions of the Appellate courts and which will be a source of significant relief to employers large and small, the Supreme Court emphasised that in every case the key question is whether
‘the wrongful conduct was so closely connected with acts the employee was authorised to do that, for the purposes of the liability of his employer to third parties it might fairly and properly be regarded as done by the employee whilst acting in the ordinary course of his employment.’
Approaching the consideration of Morrison’s potential liability for the actions of a rogue auditor afresh, the Supreme Court held that ‘the mere fact that [the auditor’s] employment gave him the opportunity to commit the wrongful act would not be sufficient to warrant the imposition of vicarious liability.’
It concluded that in the present case it is ‘abundantly clear’ that the auditor was not engaged in furthering his employer’s business when he was pursuing a personal vendetta. The ‘closeness of connection’ test was therefore not satisfied.
In Barclays Bank Plc v Various Claimants [2020] UKSC 13 the Supreme Court considered the correct approach to determining whether a relationship giving rise to vicarious liability exists between two persons who are not in an employment relationship.
The Barclays case concerned a doctor who ran a private practice and performed a range of work. Part of that work was to conduct pre-employment medical assessments for prospective employees of Barclays Bank. The doctor was alleged to have sexually assaulted some 126 Claimants employees during the course of examinations he conducted between 1968 and 1984.
The Supreme Court confirmed that the correct approach to deciding whether to impose vicarious liability continues to be to ask whether the tortfeasor was carrying on business on his/her own account or whether s/he was in a relationship akin to employment.
The scope of vicarious liability had been gradually expanded over time, both in terms of the analysis of the work relationships to which it applied, and the type of act or omission to which it applied. Perhaps the Morrisons and Barclays cases indicate that the trend of expansion of vicarious liability may have come to a halt.
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This article was written by Ijeoma Omambala QC, Victoria Webb & Ben Jones.
